European clouds should be set up within the next five years to encourage small business take-up of on-demand IT services, the European commissioner for telecoms and media has said.

Viviane Reding, speaking at the unveiling of the Commission's Digital Europe strategy on Thursday, said 99 percent of EU firms are small- to medium-sized enterprises (SMEs), but only nine percent of them use electronic invoices and only 11 percent have IT-based human resource management.

"If SMEs could access computing power over the web, they would no longer need to buy and maintain technologies or IT applications and services," Reding said. "Such web-based services--called cloud computing--are the medicine needed for our credit-squeezed economy: they can make businesses more productive by shifting from fixed costs (for example, hiring staff or buying PCs) to variable costs (for instance, you only pay for what you use)."

Reding pointed out that nearly all cloud services are United States-owned and United States-based, and complained that "once again, the United States has started to exploit a business model before Europe has managed to do so".

"We cannot let this continue. In my view, we need a major effort to set up Europe-hosted clouds to give European SMEs access to fast, open and productivity-enhancing services," Reding said. "A recent study estimated that online business services could add 0.2 percent to annual GDP growth, create a million new jobs and allow hundreds of thousands of new SMEs to take off in Europe over the next five years. So what are we waiting for?"

Reding said the efficiencies brought about by cloud computing could "lead to electricity savings in computing activity of up to 80 percent". She also called on European businesses to use more video-conferencing services, so as to cut down on business travel and the resulting carbon emissions.

The commissioner also said it needed to be "easier and more attractive to access digital content, wherever produced in Europe". She repeated her call for pan-European intellectual property rights licensing, and also called for new rules to encourage the digitization of books — to achieve this latter goal, she said, the creation of a Europe-wide public registry for out-of-print and orphan works could encourage private investment in digitization.

"This would also help to end the present, rather ideological debate about 'Google books'," Reding said. "I do understand the fears of many publishers and libraries facing the market power of Google. But I also share the frustrations of many internet companies that would like to offer interesting business models in this field, but cannot do so because of the fragmented regulatory system in Europe."

Reding warned that a failure to reform European copyright laws on orphan works and libraries would see Europe falling behind the US in the digitization of content.

Common European rules and standards must also be set up to encourage the take-up of mobile payments, Reding said.

She identified some short-term goals, calling again for the Telecoms Package to be passed into law--the bundle of reformed rules is being held up by the debate over a net neutrality clause--and for solid rules on fiber-based broadband deployment and next-generation mobile network deployment. Reding also urged EU governments to speed up the switchover from analogue to digital broadcast services.

David Meyer is a freelance technology journalist. He fell into journalism when he realised his musical career wouldn't be paying many bills. His early journalistic career was spent in general news, working behind the scenes for BBC radio and on-air as a newsreader for independent stations. David's main focus is on communications, of both...
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